What do Disability Buy-Sell policies primarily address?

Disability Buy-Sell policies are designed to address the situation that arises when an owner of a business becomes disabled and is unable to continue participating in the business. These policies ensure that the ownership interest of the disabled partner can be bought out by the remaining partners, thereby facilitating a smooth transfer of equity among the active partners.

In the event of a partner’s disability, the financial resources provided by the disability buy-sell policy can help the remaining partners purchase the disabled partner's share of the business. This is critical for maintaining business continuity and preventing potential conflicts among partners about the management and ownership of the business during the partner's absence.

The focus of Disability Buy-Sell policies is not on employee retirement planning, insurance for business assets, or general liability protection. Instead, their primary purpose is to ensure that ownership interests can be efficiently and fairly transferred among the partners in the face of a partner's disability, securing the future of the business.